2012 PLP (Trib (PTD)

The department through this appeal has objected against the impugned order of the learned CIR(A) dated 28-4-2011 on the following grounds:-- "(2) That the CIT(A) was not justified to annul the order in a slip shod manner without assigning any cogent reason. (3) That the CIT(A) was not justified to annul the order under sections 161/205 on the ground that the taxpayer was not obliged to keep records beyond 30-6-2010 when the details/documents were filed on 3-2-2011." We have heard the learned representatives from both the sides and have also perused the impugned order of the learned CIR(A) and the order passed by the Taxation Officer under sections 161/205 of the Ordinance, 2001. We have found that the learned CIR(A) has annulled the order on the legal grounds that the tax payer involved in this matter is 2005 which was ended on 30-6-2005. Thus on very day vested interest was created in favour of the taxpayer in this case that it would maintain records as prescribed under section 74 of the Ordinance for the next five years i.e. upto 30-6-2010 which had to operate prospectively and not retrospectively as has been held by this Tribunal as well as by the honourable superior courts. In this regard a decision of the Hon'ble Supreme Court of Pakistan reported as 2009 SCMR 973 = 2009 PTD 1016 has been referred wherein it has been held that vested right occurred cannot be taken away subsequently applying the same retrospectively. The Hon'ble Supreme Court in this case has referred the case of Army Welfare Sugar Mills wherein it has been held that if an exemption from payment on excise duty or any other tax has been granted for a specified period on certain conditions and a person who fulfils those conditions acquire a vested right. The Hon'ble Supreme Court in this case has also referred another case of Al-Samrez Enterprises wherein it has been held that the enactment which prejudicially affected vested right or a legality of past transactions or impaired contract cannot be given retrospective operation. It is further held that it will be an inadequitable and unjust to deprive a person who acts on such an assurance of the right to exemption and expose him to unforeseen loss in the business transactions by suddenly withdrawing the exemption after he had made legal commitments. And finally it has been held that a right created in favour of person and a subsequent amendment in the original scheme cannot be given retrospective effect by a subsequent act the department to destroy the said right. The honourable Lahore High Court in a case reported as PLD 1969 Lahore 24 has held that the right of appeal existing on day on which proceedings on lis commences is a vested right and such right to be governed by law prevailing on that day and not by law prevailing on day of its decision. Such vested right can be taken away only by the subsequent enactment if it so provided expressively. The learned counsel representing taxpayer has referred the relevant section 174 of subsection (3) of the Ordinance 2001 which has been amended vide Finance Amendment Ordinance, 2009 w.e.f. 28-10-2009 substituted the word 'five' with 'six' regarding maintaining the accounts and documents. The learned counsel in this regard has also placed before this Bench the decision of the honourable Supreme Court of Pakistan in the matter of Mrs. Kohi Noor Textile Mills Ltd. reported as PLD 1974 SC 284 = 1974 PTD 239 Elahi Cotton Mills Ltd. reported as PLD 1997 SC 582 = 1997 PTD 1555, Zakaryia H.A. Sattar Bilwani reported as 2003 PTD 52, Fazal Din and Sons reported as 2009 SCMR 73 = 2009 PTD 1016 and the decisions of the Hon'ble High Court reported as PLD 1969 Lah. 24 in the case of Messrs Essential Industries, PLD 1977 Lah. 1168 in the case of Mian Hameed Ahmad and PLD 1979 Lah. 703 in the case of Mian Muhammad Khalid. In all these cases it has been simultaneously held that any existing rights are affected or the giving of retrospective operation causes inconvenience or injustice, then the courts will not favour an interpretation giving retrospective effect to the amendment. Keeping in view of these decisions of the Hon'ble higher courts we are of the view that the learned CIR(A) has rightly annulled the order as the taxation officer has called for the record regarding tax year 2005 through the show-cause notice bearing No.897 dated 29-12-2010 and subsequently passed the order under sections 161/205 for the tax year 2005 on 22-3-2011 has rightly been annulled by the learned CIR(A) and therefore, no interference in this regard is required. The appeal filed by the department is dismissed. C.M.A./244/Tax(Trib.) Appeal dismissed.